Thursday, 13 December 2012

A tempest in a Greek teapot?

By Patricia H. Kushlis

In late October a list of 2,059 Greeks and Greek companies with
supposed accounts in the Swiss bank FSBC suddenly appeared in the Greek magazine
Hot Doc. The list revealed only the names and professional identifications of
the account holders. No other list of Greeks with foreign bank accounts has subsequently
appeared. Yet the Hot Doc article created an instant political θυελλα (thiella), or storm, in Greece among
the Greek 99%, the country’s wealthiest 1% and its politicians.

Yet, this intrigue - also reported in two lengthy articles in The New York Times – could, however, concern
not one but two lists. Nothing in Greece
is ever as simple as it seems.

The first is a list which IMF Managing Director Christine
LaGarde apparently received when she was France’s Minister of Finance and
passed on to then Greek Minister of Finance George Papaconstantinou who
apparently lost it, hid it or, in any event, failed to use it when the Papandreou
government had promised to – but didn’t – collect taxes from wealthy Greek tax
evaders to help restore the Greek treasury to health. The
second list is the one published in Hoc Doc in October. But are the two one in the same? And if so, why is the list published in Hot
Doc likely out of date and just how important is the list, or lists, to
resolving Greece’s economic failings?

One can hardly blame the shrinking Greek middle class for its
anger at the harsh austerity which successive governments have forced upon it
to keep the country from falling into bankruptcy and expulsion from the EURO. Those terms – which have thus far failed to
regenerate the economy - have sunk this small Eastern Mediterranean country
into an ever greater economic depression over the past six years. They have hit wage earners the hardest fueling
anger not just at the EU, the Germans, the IMF and their own political leaders
but also at the country’s wealthiest who live the life of Riley all the while stashing
money in off-shore accounts to avoid the local tax collector.

But will The List published by Greek investigative journalist
Kostas Vaxevanis help resolve the Greek government’s financial problems? If you read his own justification in The
Guardian October 30, 2012, Vaxevanis states only that the list he published
contains names of Greeks with Swiss bank accounts (he does not say they are FSBC
ones) nor does he state that the list he published is one and the same as the
“Lagarde list” apparently given to the then Greek finance minister in
2010.

Transparency is often an amazingly effective antidote to the
secrecy that envelopes suspect dealings and questionable relationships. But transparency also needs to be based first
and foremost on the truth. To begin with,
is the list of names that Hot Doc published in October a replica of the one
reportedly given to Venizelos over two years ago? Or not?

If the latter, what caused the Athens police to arrest
Vaxevanis but then seemingly to almost immediately back off and ultimately charge
him with only a misdemeanor –the invasion of privacy for his publication of
this list? Does the Greek government
know something that the public doesn’t?

Also interesting is a concluding interview with journalist
Panayotis Lampsias who told Zougla that
he had opened an account with the FSBC branch in Glyfada, an Athens suburb, in
2011 to help finance his children’s studies in London. Another individual on the List is an FSBC
branch manager in Greece.

Others on The List which Vaxevanis published included
department store, shipping and construction company owners as well as one – if not
more - of Greece’s best known jewelers who has stores in several European
cities including Switzerland as well as New York. There are also academics, doctors, actors and
even a poet and a sculptress: people one
would expect to travel abroad for professional reasons and, for that matter, be
paid for work done or sold outside Greece. Old
habits may simply die hard – or maybe this is simply a not unreasonable reaction
to the unsettled future of Greece’s relationship to the Euro.

A Little History . . .

For a Greek citizen traveling or living overseas prior to
2001 before the country joined the EURO, the drachma’s value was unreliable. The government traditionally “solved” its
international credit problems by devaluing its currency on the international
market. The amount depended on the country’s
economic situation at the time. Therefore,
if a Greek needed to pay bills abroad in a foreign currency – from college
tuition to a hotel room – opening and maintaining a foreign bank account in a
stable currency made sense. Years
before, even trying to exchange drachmas for dollars – or another “hard”
currency – was more akin to living through an Aristotelian tragedy than
anything else. Suffice it to say, just
about anyone who lived in Greece and traveled abroad kept a hard currency
account outside the country – from students and guest workers to shipping
magnates and department store owners.

The intervening years and the EURO helped change it.

Take a look at the names and professions or occupations of
the account holders on the list that has been published. I wonder if it’s the smoking gun one might
think. It’s written in French and
English so even elementary Greek is not needed although if you’re looking for a
particular name, the lack of alphabetical order makes the process more tedious
than it could be. But why doesn’t the list indicate the name of
the company or bank anywhere? Furthermore,
I have to wonder whether Swiss bankers still kept account ledgers this way in
2010 or even 2001.

Yes, I came across several names of Greece’s one percent but
it shouldn’t take a list like this to figure out that such individuals would
have accounts abroad. But I also saw
names of students, engineers, and professors. These people also travel abroad
and need to pay bills overseas. Not to mention a few foreigners – perhaps
married to Greeks – who would have wanted to protect their foreign currency
earnings from domestic inflation or worse.
And yes, there are a few Greek government officials – usually high
ranking political appointees – on the list too. I would have expected to see more although
FSBC is only one of a number of foreign banks where money can be secretly stashed.

Yet it seems to me the Greek government vastly overreacted
to the list’s publication thus compounding one more unnecessary public
relations problem. What doesn’t make
sense is why. It’s obvious that the uncertainty caused by the continuing Greek
financial crisis and the government’s difficult relationship with its foreign creditors
should result in the hemorrhaging of capital from its citizens private bank
accounts. But maybe that’s a more complicated
issue best kept for another day.
Meanwhile, is this story about a list – or lists - in reality just an
October tempest in an autumn teapot?

Comments

A tempest in a Greek teapot?

By Patricia H. Kushlis

In late October a list of 2,059 Greeks and Greek companies with
supposed accounts in the Swiss bank FSBC suddenly appeared in the Greek magazine
Hot Doc. The list revealed only the names and professional identifications of
the account holders. No other list of Greeks with foreign bank accounts has subsequently
appeared. Yet the Hot Doc article created an instant political θυελλα (thiella), or storm, in Greece among
the Greek 99%, the country’s wealthiest 1% and its politicians.

Yet, this intrigue - also reported in two lengthy articles in The New York Times – could, however, concern
not one but two lists. Nothing in Greece
is ever as simple as it seems.

The first is a list which IMF Managing Director Christine
LaGarde apparently received when she was France’s Minister of Finance and
passed on to then Greek Minister of Finance George Papaconstantinou who
apparently lost it, hid it or, in any event, failed to use it when the Papandreou
government had promised to – but didn’t – collect taxes from wealthy Greek tax
evaders to help restore the Greek treasury to health. The
second list is the one published in Hoc Doc in October. But are the two one in the same? And if so, why is the list published in Hot
Doc likely out of date and just how important is the list, or lists, to
resolving Greece’s economic failings?

One can hardly blame the shrinking Greek middle class for its
anger at the harsh austerity which successive governments have forced upon it
to keep the country from falling into bankruptcy and expulsion from the EURO. Those terms – which have thus far failed to
regenerate the economy - have sunk this small Eastern Mediterranean country
into an ever greater economic depression over the past six years. They have hit wage earners the hardest fueling
anger not just at the EU, the Germans, the IMF and their own political leaders
but also at the country’s wealthiest who live the life of Riley all the while stashing
money in off-shore accounts to avoid the local tax collector.

But will The List published by Greek investigative journalist
Kostas Vaxevanis help resolve the Greek government’s financial problems? If you read his own justification in The
Guardian October 30, 2012, Vaxevanis states only that the list he published
contains names of Greeks with Swiss bank accounts (he does not say they are FSBC
ones) nor does he state that the list he published is one and the same as the
“Lagarde list” apparently given to the then Greek finance minister in
2010.

Transparency is often an amazingly effective antidote to the
secrecy that envelopes suspect dealings and questionable relationships. But transparency also needs to be based first
and foremost on the truth. To begin with,
is the list of names that Hot Doc published in October a replica of the one
reportedly given to Venizelos over two years ago? Or not?

If the latter, what caused the Athens police to arrest
Vaxevanis but then seemingly to almost immediately back off and ultimately charge
him with only a misdemeanor –the invasion of privacy for his publication of
this list? Does the Greek government
know something that the public doesn’t?